Permanent Index (PI)

The Permanent Index (PI) represents the foundational economic core of the AO Ecosystem, serving as an on-chain, permissionless, autonomous index.

Permanent Index (PI): Overview

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PI consists of an equally weighted tri-part asset composition:

• ⅓ $AO Token

• ⅓ $AR Token

• ⅓ Fair Launched Ecosystem Assets (FLPs)

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Structure & Core Components

The Permaweb Index incorporates four primary components, each serving a critical role:

1. PRISMA (Parallel Rebalancing & Intelligent System for Market Auctions) – Acts as the central rebalancing engine. PRISMA intelligently and autonomously rebalances asset holdings, starting auctions, maintaining the desired asset allocation and optimizing market interactions.

2. FLAIR (Fair Launch AO Interactions Routing) – Manages interactions with Fair Launched Projects (FLPs). It delegates AO tokens to the FLP processes, overseeing rewards, token distributions, and ecosystem interactions.

3. PIVOT (PI Vault Orchestration Technology) – An intelligent agent system embedded within PRISMA. PIVOT autonomously handles the PI liquidity vault by liquidating or converting PI tokens to underlying assets, aligning asset management precisely with user requests while minimizing slippage and risk.

4. Mint – Responsible for the creation (minting) of the $PI token.

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Foundation

The Permanent Index maintains its composition according to the following equation:

$$PI = \frac{1}{3}AO + \frac{1}{3}AR + \frac{1}{3}\sum_{i=1}^{n}FLP_i$$

Where:

$$\begin{aligned} AO,\ AR &= \text{fixed proportions of the total index} \\ FLP_i &= \text{individual Fair Launched Project assets dynamically} \\ &\quad\text{selected based on market criteria} \end{aligned}$$

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Mint

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Overview of Key Parameters

Notation	Description	Example
$AO$	The $AO Token	-
$AR,\ FLP_i$	Underlying assets held by $PI$	-
$PI$	Current circulating supply of $Pi tokens	10,000
$V_{\Pi}$	Total value (in $AO) of all assets held by PI	20,000
$AO_{u}$	Amount of $AO delegated by a user	600
$AO_{p}$	Amount of $AO delegated by a project	1,200

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Token Minting Mechanism (Proportional Issuance)

When $AO$ tokens are delegated to $\Pi$, they're immediately divided into three equal portions:

• One-third remains as $AO

• One-third is used to acquire $AR

• One-third is invested into selected Fair Launched Project assets ($FLP_i$).

The amount of $\Pi$ tokens minted is proportional to the user's contribution relative to the total value of assets within the index.

Formula (for Users):

$$\Pi_{u} = \frac{AO_{u} \times \Pi}{V_{\Pi}}$$

Example:

\text{For } AO_{u}=600,\ \Pi=10,000,\ V_{\Pi}=20,000:\quad
\Pi_{u}=\frac{600 \times 10,000}{20,000}=300

Interpretation: A user delegating 600 AO tokens receives 300 new $\Pi$ tokens, reflecting their proportional share of the index's total assets.

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Token Minting for Fair-Launched Projects

Projects launching via Fair Launch similarly delegate $AO$ tokens, split equally into the three asset categories. Their issued tokens also maintain proportional fairness.

Formula (for Projects):

\Pi_{p} = \frac{AO_{p} \times \Pi}{V_{\Pi}}

Example:

\text{For } AO_{p}=1,200,\ \Pi=10,000,\ V_{\Pi}=20,000:\quad
\Pi_{p}=\frac{1,200 \times 10,000}{20,000}=600

Interpretation: A project receives 600 $\Pi$ tokens upon delegating 1,200 AO tokens.

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